Solar Co-ops Are Appealing but Ask A Few Questions First

Band together with other homeowners in your area to get solar panels installed at the same time and qualify for a group discount.

That’s the idea behind solar cooperatives around the country and across Virginia over the last few years. Sometimes called “solarize” programs, cooperative purchasing programs held on a regular basis promise big savings to homeowners who join up.

For example, here’s the pitch from the latest solar cooperative program in the Roanoke area running this spring, according to the Roanoke Times:

A new initiative will allow Roanoke-area homeowners and businesses to install solar energy systems at reduced prices.

By joining the Greater Roanoke Solar Co-op, participants will use a competitive bidding system to get a group-rate discount on the cost of purchasing and installing solar panels.

The non-profit group behind the solar co-op, Solar United Neighbors of Virginia, has run similar programs before in our area and around Virginia, so they know what they’re doing. And their goal is to help spread solar more quickly around the state, a goal which we wholeheartedly support.

Homeowners who join the co-op agree to get solar from a single solar installation company:

Once the co-op group is large enough, with about 25 members, it will make a request for proposals from local solar panel installers and then select one firm to do the work. Each member of the co-op will sign their own contract at the group discount.

It’s a straightforward process on paper, and if it works well, homeowners can go solar at home for a good price while letting somebody else handle the details.

The only downside is that, when it comes to home solar installations, the devil can be in the details. And sometimes homeowners not knowing the details of a co-op or solarize proposal can cause problems down the road.

What Happens When A Solar Co-op Goes Wrong

A homeowner who goes solar is usually so excited to realize his or her clean energy dream that they’re overjoyed for years. Most solar homeowners find it pretty satisfying to make their own clean power at home — and see their electric meter run backwards.

They can’t imagine a situation where they’d actually want to reverse their decision to go solar, and have brand new panels removed from their roof. It would have to be something pretty bad to make that happen.

But that’s exactly what happened to Bob Brown of Killingworth, Connecticut, as the NBC TV station serving the state reported a couple years back (Click here to watch the video).

Click on the image to watch the video.

Brown signed up for solar from the local solarize program, a solar co-op, that engaged a company called Be Free Solar to install solar on all the homes involved. But things didn’t go as planned.

“Brown said his problems began when the company handed him an amended work order in his driveway after the company put different panels on his roof than the ones he ordered,” the TV report explained.

Since solar panels vary in quality and price, Brown was concerned that the company was substituting cheaper panels while still making Brown pay the original price for the panels he’d been promised.

When Brown asked them about it, the company claimed that the new panels were an “upgrade,” and were actually higher quality than the panels originally promised.

The company went on to explain that, under its contract with the co-op homeowners, it had the right to switch solar panels, according to a statement it made to the NBC TV reporter:

There is a time-lag between the signing of the contract and the installation of the solar panels because of the volume of people that have signed up. In that timeframe, the original brand of solar panels can become unavailable and the contract allows the substitution of equipment.

But for Brown, the substitution felt like a bait-and-switch, a big “red flag.” He lost trust in the solar company and in the solar co-op process. Ultimately, Brown asked the company to remove the solar panels from this roof and give him his money back.

The TV report goes on to say that other homeowners did not appear to have the same problem as Brown did. The non-profit organization sponsoring the Connecticut solar co-op felt that other homeowners were satisfied.

Yet, Brown’s story of disappointment offers lessons for any any homeowner getting a contract from a solar installer, whether through a co-op or not:

Read the fine print on your contract.

Educate yourself about the quality and output of the solar panels that the company is promising to use.

Make sure your roof is suitably designed and tilted to effectively host solar panels.

I would add that this advice applies double to a proposal that you get through a solarize or solar co-op program. Don’t let your trust for the non-profit group running the program make you think you can avoid the trouble of reading the contract yourself.

Solar Co-ops Are A Mixed Bag

Main Street Solar has participated in solar co-ops in the past and we know that customers can have a good experience. But unfortunately, we’ve also seen too many situations in solar co-ops where things went wrong.

Probably the biggest problem is the one described above, when an installer promises one kind of solar panel or inverter to the members of the solar co-op at first, but later goes on to install different equipment than promised. And in our experience, whether the company labels the new equipment an “upgrade” or not, the new panels and inverters are usually lower quality than originally promised.

Then, despite their claims about big discounts, when you examine the quality, solar co-ops may not actually offer the best price after all.

Where does the discount come from?

You might think that if a solar installer has contracts to do dozens of homes at the same time, that the installer can order solar panels and inverters from the manufacturers in quantity and get a bulk discount that they can pass along to the homeowners in the co-op.

Unfortunately, it doesn’t always work that way. If an installer is doing 25 or 50 homes at the same time, that’s usually still not a high enough quantity to qualify for a discount. In most cases, ordering solar panels for one home or fifty homes costs the solar installer the same amount per panel.

If they’re not getting a better price on equipment, then any discount the installer claims to pass along to homeowners may have come out of the installer’s profit margin. No business wants to cut its profit, so if they’re under pressure by the co-op to offer a discount, then the installer may just find ways to cut corners on quality.

Another factor that makes discounting difficult for a solar installer in a co-op is that the non-profit organization sponsoring the co-op will usually take a finder’s fee or commission on each sale. That fee can add $500 or more to the cost of solar for homeowners in the co-op. Again, that money has to come from somewhere.

Yet another incentive for the installer in a co-op to cut corners on quality. And the quality of solar panels and the overall installation matters.

A poorly installed solar array with low-quality equipment can have all sorts of problems. It can produce less solar power than you expected, cutting into your energy savings. It can cause problems with your roof or your home electrical system. And a solar array can even break down entirely, requiring expensive service that may not be covered under your warranty — assuming that the installer is still in business when something goes wrong.

Finally, the contract you’ll get through a solar co-op will specify a timeline for your solar installation to be completed.

Yet, as with equipment, the contract may also allow for changes. There may be small print about delays being allowed. Be sure to check. Otherwise, you may find yourself waiting weeks or months longer than you had expected.

Protect Yourself When Dealing with a Solar Co-op: Get Another Proposal

The bottom line is that solar co-ops are not a magic bullet.

If you’re getting a discount though a solar co-op, the quality may be an issue. You probably won’t be so dissatisfied that you’ll want to remove panels from your roof. But you may find that you’ve paid more for lower quality solar through a co-op or solarize program than if you had just cut out the middleman and gone straight to a local solar installer.

The only way to know for sure is to compare. So, if you are going to get a proposal through a solar co-op, you should also get at least one other one from a local solar installer who’s not in the co-op.

With two proposals, you can compare. And to get an apples-to-apples sense of what you’d actually be getting, make sure you look at more than the final price. Also look at the quality of the equipment — and whether the installer has small print in their contract that lets them substitute different panels and inverters for whatever reason.

Main Street Solar would be pleased to provide a second option to anybody who’s gotten a proposal from a solar co-op or solarize program. Just request a free quote today and we’ll let you know whether your place is suitable for solar and if so, what we’d suggest in terms of equipment and how much you could save.